New Delhi: Ahead of Prime Minister Narendra Modi's visit to China, industry body CII on Tuesday urged the government to take immediate steps to address issues facing Indian companies while dealing with the neighbouring country such as trade imbalance, non-tariff barriers.
"Sectors such as IT, drugs and pharma, and media and entertainment pose several challenges for Indian companies. To contain the rising trade deficit between India and China, CII suggests urgent measures to reduce non-tariff barriers in these sectors," CII Director General Chandrajit Banerjee said.
In a memorandum submitted to the Government, CII pointed out although bilateral trade rose at a Compound Annual Growth Rate (CAGR) of 15 percent since 2007-08, the trade deficit has been burgeoning in an unsustainable manner.
Besides, the industry body said it expects financial commitments during Modi's visit to the China this week to exceed the USD 20 billion investments pledged over a five year period during Chinese President Xi Jinping visit in September.
"We believe that the visit of the Prime Minister to China will be a landmark visit and it should give a tremedous boost to the bilateral and economic relationship between the two countries".
"When the President of China was here last September around USD 20 billion of contracts were signed. Obviously we expect a lot more to happen when our Prime Minister visits China this week. We do expect trade to grow exponentially between the two countries," CII President Sumit Mazumder said.
In 2014-15, the deficit touched USD 48 billion. According to the industry body, India is emerging as one of China's fastest growing markets and trade deficit is likely to widen further.
CII outlined a four-point action plan to bridge the trade deficit with China.
The agenda for action entails leveraging India's importance as a market for Chinese products as well as an investment destination for Chinese companies.
It also pushes for market access to Indian companies in key sectors of China ? Pharma, IT, Tourism, Media and Entertainment, Auto Components and others.
The action plans calls for prioritisation of Chinese FDI in 18 identified industry sectors and establishing a sovereign deal to attract investment in Indian infrastructure.
It also suggests setting up an institutional committee of Government and industry led by the Prime Minister's Office or Department of Commerce to direct and monitor the achievement of goals.
"We believe that it is the right time for us to look for better market access in China and also to create an enabling environment for Chinese companies to invest in India.
"As far as exports to China are concerned we have identified five areas, where we think there is good potential for Indian companies to increase exports to China. pharmaceuticals, IT, automotive components, media & entertainment and outbound tourism," Executive Director, Mahindra & Mahindra Ltd Pawan Goenka said while addressing the conference via video conferencing.
Goenka is Chairman of CII Task Force on India and China.
